BPM for Sarbanes-Oxley Compliance and Beyond

Using Compliance Initiatives as a Gateway to Strategic Operational Risk Management

Corporate governance is not merely a matter of compliance with legislative mandates such as Sarbanes-Oxley. It's about instituting an internal control framework, reducing deficiencies in controls, improving inefficient business processes, and managing risk across your entire enterprise.

To that end, HandySoft's BPM-based SOXA Accelerator empowers a long-term strategy for moving beyond mere compliance to a less costly and more effective internal control environment. Why settle for routine compliance when optimum performance and maximum value is your ultimate goal?

By implementing a single infrastructure that addresses both the “definition” of controls and the automation/enforcement of controls companies can realize long-term benefits and implement an overall proactive approach to strategic operational risk management. Learn more about HandySoft SOXA Accelerator.

How Do I Move From SOX Compliance to Strategic Operational Risk Management?

• Phase 1 – Repeatable Internal Controls Compliance. Your primary objective should be establishing a repeatable framework for documenting, testing, and reporting on internal controls. Utilizing BPM-based assessment tools will facilitate the standardization of your documentation (risk and control matrices, narratives, test procedures, and plans), and will enable the management of work assignments, as well as the collection of documents and data, resulting in auditable evidence and concise reporting. Establishing a repeatable framework within a software tool will allow you to easily reuse/augment content for easier period-over-period change management, so you’re not re-inventing the wheel each period.
• Phase 2 – Expanding Beyond the Assessment of Internal Controls Over Financial Reporting. Assessing risk over operational and strategic business areas can further strengthen the overall environment and help institute the cultural change needed to derive real benefit from your efforts. In this phase, you should begin to identify where key controls are deficient — once automated, these newly enforced controls can significantly reduce testing efforts and reduce ongoing remediation. BPM-based software tools can help with both the assessment and analysis of risk at the operational and strategic levels, and they can be applied to the automation of deficient manual controls, as well.
• Phase 3 –Implementing a More Strategic and Proactive Approach to Operational Risk Management. Many software solutions “tackle” risk management through questionnaires and scoring techniques intended to define, capture, and assess enterprise-wide risk. Such solutions are used to define and document the events that cause risks to occur, determine how the company should respond to those risks, and analyze actual risk occurrence and loss. Utilizing software can be very effective for strategic risk management; however, a strong corporate commitment and cross-organizational support are required, as these tools will produce information only as accurate as the information fed into them.

A more innovative approach to Operational Risk Management is to embed control enforcement systematically into your business processes. This is where BPM delivers the greatest value.

BPM solutions can proactively address risk management through controls automation and enforcement. Many of today’s existing systems (including ERP systems) fail to provide automated capabilities for controls and policy rules enforcement where human involvement (such as approvals, authorizations or exceptions) occurs. This is where deficient controls tend to be prevalent and problematic.

Once these controls are automated, they are less likely to fail, less costly to test, and — as this is the only way for users to perform a given task — the policies are inherently enforced. BPM also monitors thresholds and key business performance indicators and controls within business processes, permitting real-time response using an automated alert structure. This is how your organization can truly optimize your compliance initiatives.

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Contact M&H today to learn more about our Sarbanes-Oxley compliance and enterprise risk management solutions.